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Sirius XM (SIRI) Q2 Earnings Beat, Subscriber Revenues Up Y/Y

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Sirius XM Holdings (SIRI - Free Report) reported second-quarter 2021 earnings of 10 cents per share, which beat the Zacks Consensus Estimate by 42.8% and increased 100% year over year.

Total revenues, on a reported basis, increased 15.2% year over year to $2.15 billion. The top line beat the consensus mark by 4.3%. On a pro-forma basis, revenues increased 15.1% year over year.

Subscriber revenues (76% of total revenues) rose 4% from the year-ago quarter to $1.64 billion.

Advertisement revenues (19.9% of total revenues) increased 81.8% year over year to $429 million. Equipment revenues (2.4% of total revenues) surged 104% to $51 million.

Other revenues (1.8% of total revenues) increased 2.7% from the year-ago quarter to $38 million.

Sirius XM Holdings Inc. Price, Consensus and EPS Surprise

Sirius XM Holdings Inc. Price, Consensus and EPS Surprise

Sirius XM Holdings Inc. price-consensus-eps-surprise-chart | Sirius XM Holdings Inc. Quote

Sirius XM Standalone Details

Sirius XM segment pro-forma revenues were $1.64 billion, up 6.7% year over year. While the total subscriber base increased 0.7% to 34.5 million, the company witnessed growth of 4.4% in ARPU, which was $14.57.

Self-pay subscribers increased 3% year over year to 31.3 million. The company lost 23K net self-pay subscribers in the reported quarter.

Sirius XM traffic users were at 9.2 million, down 2% year over year. Also, Canada subscribers decreased 1% to 2.5 million.

Average self-pay monthly churn rate was 1.5% in the second quarter, down 10 basis points year over year.

Subscriber revenues rose 3.8% year over year to $1.5 billion. Equipment revenues increased 104% to $51 million.

Advertising revenues were $46 million, up 84% year over year. Other revenues increased 2.7% to $38 million.

Pandora Details

Pandora’s pro-forma revenues increased 53.6% year over year to $516 million owing to 81.5% growth in advertising revenues, which totaled $383 million. Subscriber revenues climbed 6.4% to $133 million.

The growth in ad revenues was due to increase in second-quarter monetization to $100.4 per thousand hours, up 81.7% year over year.

However, ARPU decreased 0.4% year over year to $6.67.

Monthly active users were 55.1 million at the end of the reported quarter, down from 59.6 million in the year-ago quarter. Ad-supported listener hours declined 7.9% to 3.03 billion.

Pandora exited the second quarter with 6.51 million self-pay subscribers, up 4.2% year over year.

Operating Details

In the second quarter, total operating expenses increased 2.7% year over year to $1.5 billion.

Revenue share and royalty costs were up 12.4% year over year to $662 million. Programming & content costs were $128 million, up 24.3%. Transmission costs increased 22% year over year to $50 million.

Cost of equipment remained flat year over year at $4 million. Customer service & billing costs increased 4.1% to $126 million.

Subscriber acquisition costs increased 85.4% year over year to $89 million. Engineering, design and development expenses increased 13.5% to $59 million.

Sales and marketing expenses increased 12.9% to $227 million. General and administrative costs increased 11.8% to $114 million.

Adjusted EBITDA increased 13.8% year over year to $700 million.

Balance Sheet

As of Jun 30, 2021, cash and cash equivalents were $1.12 billion compared with $59 million as of Mar 31, 2021.

Long-term debt, as of Jun 30, 2021, was $8.8 billion compared with $8.5 billion as of Mar 31, 2021.

At the end of the second quarter, Sirius XM’s net debt to trailing 12-month adjusted EBITDA ratio was 3.2.

2021 Guidance

Revenues are expected to be approximately $8.55 billion. Adjusted EBITDA is expected to be around $2.6 billion.

The company anticipates adding around 1.1 million Sirius XM self-pay net subscribers in 2021.

Free cash flow is expected to be approximately $1.7 billion.

Zacks Rank & Other Stocks to Consider

Currently, Sirius XM carries a Zacks Rank #2 (Buy).

Wolverine World Wide, Inc. (WWW - Free Report) , Brunswick Corporation (BC - Free Report) and Deckers Outdoor Corporation (DECK - Free Report) are some other top-ranked stocks in the broader consumer discretionary sector, each carrying a Zacks Rank #2.  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

All these three companies are scheduled to report quarterly results on Jul 29.